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Crypto market back to high correlation as all indices closely follow Bitcoin

Data shows that the crypto market has become highly correlated again over the past week as all indexes declined Bitcoin were closed.

All after market capitalization weighted crypto indices have been moving together lately

According to Arcane Research’s latest weekly report, the 30-dayETH-BTC correlation now has a value of 0.95.

In order to assess the overall performance of the different parts of the market, the coins are classified into the “Crypto Indices”. The criterion for including an asset in a index is using its market capitalization.

“Market Cap” here simply refers to a measure of the total value of the total circulating supply of a stock cryptocurrency.

There are three main categories of indices: the “large caps”, the “mid caps” and the “small caps”. As their names suggest, these indices provide an overview of how the different sized coins are currently performing.

Here’s a chart showing how each of these altcoin indices has performed against Bitcoin over the past month:

Crypto market back to high correlation as all indices closely follow Bitcoin, Crypto Trading News

It looks like small caps have been the worst performers over the past few days | Source: Ahead of the Curve by Arcane Research – November 22nd

As you can see in the chart above, the market cap weighted indices haven’t diverged too much over the past month, but they’ve been tracking each other very closely, especially over the past week.

Both Bitcoin and mid-caps are currently down exactly 18% over the past 30-day period, while large-caps are only marginally worse off as the index’s returns are currently at 19%.

Small caps have taken a significantly bigger hit than the rest of the pack as that index is 23% underwater over that timeframe.

As can be seen from the data, assets across the crypto market have been quite correlated over the past few days.

The report also notes that the 30-day rolling correlation between Bitcoin and Ethereum has now reached 0.95. The correlation metric can have a maximum value of 1, meaning these two cryptos are now almost completely moving in tandem.

Since 2016, the BTC-ETH correlation has only been seen at such high levels for 3% of the total time.

bitcoin price

At the time of writing, the price of Bitcoin is hovering around $16.4K, down 1% over the past week. Below is a chart showing the recent trend in crypto’s value.

Crypto market back to high correlation as all indices closely follow Bitcoin, Crypto Trading News

The coin’s price appears to have recovered somewhat from the plunge below $16,000 in the past few days | Source: BTCUSD on TradingView Featured image by Art Rachen on Unsplash.com, Charts by TradingView.com, Arcane Research

Source: Crypto News Deutsch

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